The permissions on the /Users folder were also changed to be world-writable, so that anyone could read and write to the /Users folder.

As far as bugs go, this is a very fascinating one. Initially, people thought the OS X 10.9.3 update was the culprit, but as it turns out - it's the iTunes 11.2 update. I'm interested to (eventually) hear the root cause of all this, but for now, the linked article contains a temporary workaround.